Summary of the iBudget Rule Challenge Final Hearing before DOAH7/9/13-7/11/13

Earlier this month, I attended the three day rule challenge hearing before the Division of Administrative Hearings (“DOAH), at which Holland & Knight attorneys Gigi Rollini, Karen Walker and Matthew Mears represented developmentally disabled consumers challenging the third version of proposed rules to implement the iBudget. Like so many other consumers receiving services through Florida’s Developmentally Disability Services Waiver, all four Petitioners received significant proposed reductions under the iBudget further depleting their already inadequate funding. Because this case impacts every Waiver consumer, I am summarizing what occurred for those who could not attend.

In response to the rule challenge, APD hired five private attorneys, in addition to two in-house lawyers. The team of seven lawyers had significant resources at their disposal to defend the rule.

In Florida, rule challenges are fast track cases meant to be heard within 30 days from the filing of the petition. This hearing was scheduled the very first full week in July. The Holland & Knight lawyers fought hard (and succeeded) against APD’s attempts to delay the hearing. While it is difficult to go to a full-scale hearing so quickly, the Holland & Knight team was concerned that to give APD more time to prepare would drive up the expense of the case. Amazingly, despite the holiday weekend, the hearing began as originally scheduled, which was difficult but strategically important.

The case at its core is simple. The iBudget statute directs APD to set each client’s funding for services at an amount based on a statistically valid algorithm, and then consider if the person needs an increase to that amount because of extraordinary, one-time, temporary or changed needs. Florida law prohibits APD from enacting rules that run contrary to, or expand the implementing statute. Despite these legal limitations, the evidence in the case showed that:

1. APD used the algorithm only as a starting point for setting funding because, in APD’s own words, the algorithm APD designed produced “harsh results” for many. Because the algorithm does not result in an equitable allocation of the funds for DD waiver clients, APD created an elaborate and subjective “methodology” to decide whether or not to use the algorithm to set a client’s iBudget. This supplemental “methodology” treats some groups of people differently, even where clients in those groups have the exact same needs. Most glaringly, APD’s “methodology” targets existing DD waiver clients and singles them out to receive lower budgets than a new client with identical needs. Given that the law requires an “equitable allocation” of funds based on “the client’s level of need,” the evidence showed at the hearing that APD’s actual system is not consistent with the system described in the iBudget statute.

2, APD told the Florida Legislature that if it adopted an iBudget system for Florida, then 64% of existing Waiver clients would see an increase in their budgets as a result of the iBudget. However, APD later made a “policy decision” that funding increases simply would not be given and the algorithm would be used only to reduce, not increase a client’s allocation of funds.

3. Former University of Florida Professor Dr. McClave (an expert in statistics and econometrics who has written text books on these types of models and created successful Florida Medicaid models) reviewed and tested the APD algorithm and testified on behalf of the Petitioners that it was statistically unreliable, including that APD’s chosen algorithm had a margin of error of over 40%! He said that this is not a model based on a valid statistics approach, and that the model was unacceptable in his field. He memorably testified that APD’s chosen model is as accurate as “throwing darts at a wall of numbers.”

4. APD identified no specific legal authority that allowed it to implement the iBudget the way it is being done. APD could point to no legal authority to use a statistically unreliable algorithm, to reduce amounts determined by the algorithm, to use a “decision tree” process to reduce existing client’s budgets, to single out existing clients and assign them lower budgets, or to reduce budgets without any final rules at all. Recognizing the shortcomings of its own position, APD admitted it asked the Florida Legislature in 2012 to change the iBudget statute to conform to how APD was actually implementing the program. The Legislature declined to make the revisions. Regardless, APD simply continued to implement the system using its system rather than one consistent with the statute.

5. APD’s statistics expert (Dr. Niu), who designed the algorithm, testified that he did what his client (APD) asked him to do and he did his best. He did not consider other state’s algorithms. His reason was that he did not need to because he “only relies on [him]self.” He used a very few variables (about seven), and assumed he could drop out some variables (such as the entire physical status portion of the QSI) on the basis that other, similar variables (such as the behavioral status portion of the QSI) tended to measure about the same thing—not realizing that every DD client doesn’t have both physical and behavioral needs, or does not have them in equal force. The result—those with significant physical needs, but no significant behavioral needs, will get substantially lower budgets than those with equally costly behavioral needs.

Also, it was shocking to learn that Dr. Niu “meant to do testing” to ensure the validity of the model, but then just did not get around to performing the type of testing necessary to ensure the validity of the model. He did no testing against other years’ budgets (as is commonly done in statistics, apparently), or “log” method testing (as is typically done in statistics, apparently, when the model is a budget allocation or distribution model). This was the case even though Dr. Niu has done a much simpler distribution model for the Florida Department of Transportation, and he did do “log” method testing for that model.

Dr. Niu also had no response to the UF Professor’s testimony that the algorithm was not statistically valid. In fact, he said complimentary things about the other expert, Dr. McClave, and hoped his model “would get better over time.”

Note: APD testified that it will analyze each client’s iBudget every 12 months to determine what further cuts can be made. When APD decides it is appropriate, it may (or may not) re-run the inaccurate algorithm in any year it wants. Under the proposed rules, APD has authority to use the proposed subjective methods in the rule to further reduce client services at its discretion. However, for future years, the processes which permit increases for extraordinary, one-time, temporary and changed needs will no longer be available to the person whose services are being reduced. Of course, if the algorithm dictates an increase for a DD client, APD will still have the ability to find that award is “really just not medically necessary,” since APD continues to be the sole determiner of what is and what is not medically necessary.

APD’s arguments in response to Petitioners’ case were as follows: We worked really hard on this system; the Tier system has expired and, if this new system is thrown out, APD cannot return to the Tier system; we did our best; we do have authority to do what we did (without specific reference to any law or statute); and, mainly, the Florida Legislature is very happy with APD because APD has substantially cut the cost of the DD waiver program with APD’s interpretation of the iBudget system! In fact, APD testified that the Legislature “rewarded” APD as a “thank you” for doing such a good job with two additional appropriations totaling $60 million, which APD used internally and to bring people off the waitlist. [The judge asked if APD should have put that into the iBudget calculations and reappropriated the money to the existing DD clients, and APD said no; the Judge asked if APD had re-run the algorithm since APD first did it (one time) based upon each years’ new appropriation, and APD said, “No, and we are not going to.”]

And, finally, there was the real client example offered at the hearing: An amazing and articulate father of a DD 26-year-old came in and told his son’s story—with a 20 IQ, he lives in a home inherited by his father, which permits his son and two other DD clients to have extremely reduced rent. All need 24-hour supervision, which they can barely piece together between the three of them—with less and less money each year, less and less of a rate of payment each year. And, now, all three have been given iBudget reduction notices (his son’s, alone, is an over $8,000 reduction under iBudget). They were barely making it since their budget is already to the bone (even with the father’s substantial assistance). With the cuts now proposed, there is no hope and nowhere for them to live, except an institution were these cuts to be implemented.

With that, the story of this proposed iBudget system was told. The agency admitted it was not following the statute to implement the system and the model being used cannot be shown to be statistically reliable. They agreed that cuts may continue each year. Even if every client could bring into an individual hearing an expert statistician to object to algorithm used to calculate the proposed reduction, the DCF Fair Hearing Officers lack the authority to find the rules invalid. Only DOAH has that authority. Thus, the reason why this case is before DOAH for a decision, and why it is so crucial a test case.

A decision will be issued around the end of August or early September. The lawyers for the Petitioners agreed to file this case without sufficient cash in hand on the hope that once the DD community knew the truth about the proposed iBudget system, they would join together to support efforts to compel APD to use an algorithm that is statistically reliable and a process that follows the law. The Petitioners’ lawyers brought this David and Goliath case, did it in an unbelievably short period of time and, as a result, kept the costs to a bare minimum ($225,000). Our team, led by Gigi Rollini, presented a clear, articulate, and persuasive case. And, now, we have to pay her! [And did I mention that in addition to APD’s seven attorneys and the work they all created, there was also surprise evidence sent by APD at 8:30 am the final day of trial, and surprise witnesses on the final day of witness disclosure—less than one week before hearing—including an expert APD brought in at the last minute and paid $85,000 for his service. And despite the additional work and expense tied to this surprise witness, he ultimately did not even testify because he had nothing to say after hearing Dr. McClave.]

Please contribute now to help us to meet our $125,000 goal! To get there, we are asking that you consider donating at least at the $10,000 level. We also specially thank those increasing this to the $20,000 level—we could not do this without you!

Please be a part of the solution! There are two easy ways to contribute to the APD iBudget Proposed Rule Challenge:

(1) Checks may be made out to Holland & Knight LLP, and sent to ATTN: Gigi Rollini, Post Office Drawer 810, Tallahassee, Florida32302; or

Thanks to guest columnist and Executive Director of Special Gathering, Richard Stimson for this article

Many people within the mentally challenged community are receiving phone calls about the iBudgets. This is a new thing from the Agency for Persons with Disabilities (APD).

One of the major differences is that APD may ask you to give up some money. Perhaps they want you to give up $3,000 from your home-care services for which they will pay. Under the iBudget, you can say back to them, “What about $1,000? What if you give me $1,000, instead of $3,000?” Then you must wait to see what APD says.

APD calls this a negotiation. You will still be able to appeal; but APD is hoping they can find an amount you can agree to give up through these negotiation. If you ask for an appeal, it will mean that you might win your appeal and you will get everything for which you have asked. However, if you lose, then you will get nothing.

I have been to two of these negotiations. These meetings feel like buying a car. When you want to purchase a car, once you get a price from the sales person, you can ask for a lower price. Then the sales person has to go and get their boss to sign off on the amount.

I really do not have any good advice. If you just say, “No,” to the cuts and decide to appeal them it is all or nothing. You may want to negotiate with APD and try to get something rather than chance getting nothing.

For more information, you may contact: Kathy Palmer
Agency for Persons with Disabilities 4030 Esplanade Way
Tallahassee, Florida 32399 (850)488-4877

The complete statewide schedule for iBudget Florida implementation is as follows:

4/1/12 – Final component implemented for customers in areas 1 and 2, except Consumer-Directed Care Plus (CDC+) participants. Read moreâ€¦7/1/12 – Full implementation for all customers* in areas 4, 12, and 13 and for CDC+ participants in areas 1 & 2.10/1/12 – Full implementation for all customers* in areas 14 and 23 (Suncoast Area).1/1/13 – Full implementation for all customers* in areas 3 and 7.4/1/13 – Full implementation for all customers* in areas 8, 9, and 15.7/1/13 – Full implementation for all customers* in areas 10 and 11.

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APD Residential Fee Collection

On April 1, 2012, the Agency for Persons with Disabilities Residential Fee Collection Rule will be fully implemented State-wide. Attached below, please find four documents which you will need in order to implement this new policy. Please review them carefully . They are as follows: (1) The official notice regarding the residential fee collection initiative (with time frames/requirements), (2) A list of frequently asked questions (along with responses to those questions), (3) A fee calculation worksheet that may be completed by the representative payees, and (4) A copy of the rule notice.

APD Continues Cost Containment Efforts

On April 1, Agency for Persons with Disabilities (APD) will reduce the rates it pays for therapy assessments and all nursing services to the standard rate paid by the Medicaid State Plan. Currently, the APD Home and Community-Based Services Medicaid waiver pays higher rates for most of these services.
This rate change is the latest cost containment effort by APD to work toward bringing waiver expenses closer to the agencyâ€™s Legislative appropriation for the waiver.

Each year in Florida, there are threats of budget cuts to the services of people who are mentally challenged. More and more, these cuts are a reality. These are lean times everywhere. Many states are broke or going broke.

While it appears that other budget items either stay the same or they are increased, the intellectually disabled community received the projected cuts. Placing blame does little good. However, we have learned that being proactive does help, especially if the advocacy is done by self-advocates.

Last year, a group of self-advocates traveled several times during the legislative session to petition the legislators to stop the proposed changes and cuts. While walking the halls of the Senate office building, these men and women “bumped into” the president of the Senate. They asked for an appointment to speak with him and got one. Some are saying their advocacy made the difference in legislation being altered in the favor of the consumer.

Last evening, several people who are involved in Special Gathering from a couple of states met for dinner. One of the SpG volunteers also heads an agency. “We only get paid for three days of rehab now for Jill and others. Therefore, we have to be pretty creative with the days for which we are paid. The other days have to be even more creative,” she said, laughing. However, I have seen the toll this financial strain has taken on the agency and their employees.

This agency is determined to not enter a “survival mode” mentality. However, other agencies who work with our population have had to simply find ways to exist. The uncertainty of funding does play on the minds of people who are mentally challenged. They are aware of the pending difficulties.

In dealing with our members, it may be good to give them continual reassurance that God has a plan and that He will protect us if we remain faithful to Him. This will be reinforced and believed, if we truly believe that our stability doesn’t come from the government or even the value of the dollar but from a gracious God who loves us.

In response to the question posed at our Monday meeting about the reduction of res hab services as part of the cost plan review, the following is my understanding of what is required.
If a reduction to res hab IB or BF is recommended, that decision should be supported and reviewed by the area behavior analyst. It should also be supported by the support plan or progress notes.

If the reduction is related to other res hab levels,i.e., extensive 1 or minimal, the area staff can make that decision based on facility reports or the support plan. This is especially true where res hab may have been adjusted upward for a temporary condition–recent surgery or increase in behavior incidents– and never reduced, as well as where the behavior or condition that supported the original placement has diminished or no longer exists.
> Catherine Bedell
> Deputy General Counsel
> Agency for Persons with Disabilities
> 4030 Esplanade Way; Suite 380
> Tallahassee, FL 32399-0950
> Phone: 850.414.0139
> Fax: 850.410.0665
> Toll Free: 1.866.273.2273
> E-mail: cathy_bedell@apd.state.fl.us

This is information from waiverprovider.com. Thanks to Florida Unites and Aaron Nangle for providing this important information.

APD Announces A Schedule of Cuts

Agency for Persons with Disabilities (APD)

Director Mike Hansen presented an update on the agency’s cost-containment efforts today to the House of Representatives Health Care Appropriations Subcommittee.

The Legislature approved $810 million for APD’s Medicaid waiver for the 2011-12 state fiscal year that began on July 1. APD customers received $930 million worth of services last year.

The agency has been working to bring its waiver expenditures within the Legislative appropriation this fiscal year. The agency is also looking for opportunities to increase waiver flexibility and equity for customers, while continuing to protect their health and safety.

Earlier this month, APD shared five cost containment initiatives with various legislative committees that would reduce APD’s waiver obligations. The director was asked to bring back a proposed timeline for implementing the changes.

The timeframes may be contingent on developing new rules or federal approval from the Centers for Medicare and Medicaid Services (CMS).

At today’s meeting, Hansen announced plans to standardize payment rates for intensive behavior residential habilitation beginning January 1, 2012. Also on that same date, the agency will begin collecting fees from APD customers who have income to offset some of their costs of living in a group home.

APD plans to reduce the rates it pays for therapy assessments and all nursing services to the standard rate paid by the Medicaid State Plan beginning April 1, 2012. Currently, the APD Medicaid waiver pays higher rates for most of these services.

Also on the same date, APD will reduce the difference it pays between solo providers and agencies for waiver services to no more than 20 percent. Currently, those rates may differ up to 43 percent.

There was no timeline announced today for implementing cost sharing for parents who have children on the Medicaid waiver. APD is working with the Agency for Health Care Administration on this issue.

The change to the waiver requires federal approval.

After pursuing these cost-containment initiatives to APD’s Medicaid waiver, the agency expects to realize more than $14 million in reduced expenditures on an annual basis.

This is a comment to the entry, APD Changes. This gives some clarification and slightly different point of view. Thanks for your comment.

I have received this email as published at APD Changes also. I would also look at the descriptors. Your support coordinator can give you a copy.

I do know that the agency that operates the group home where my brother lives has had clients Res Hab reviewed. (This includes minimal level clients which means the possibility of clients being bumped down to basic level.) The email you posted did not have that rate for basic level but I think it is someting like 1,100 dollars.

I have heard that it is APD’s view that the organization APD had contracted with to approve services (and the level of those services) had been approving services incorrectly. APD no longer contracts with that agency and is approving services on there own (I think).

It appears from the email you posted that group home clients are being warned to review their support plans to make sure the support plan justifies the level of Res Hab. There appears to be an assumption that there is a problem with the way support plans are written.

I do not understand the line, “but the judge will only be looking at what was actually submitted. You will not be allowed to give the judge more documentation during your hearing”

If the problem is a support plan that was written incorrectly by a support coordinator and wrongly approved, why can’t a client inter new information that shows they need the service? It does make you wonder about the recent requirement on insurance (a long standing requirement that was never inforced). Will support coordinators become responcible for the loss services because of poorly written support plans?

One other thing. I wonder why the email you posted (unless I missed it) does not include supervision of self administration of medication under minimal Res Hab (the copy of the descriptors I have list that). In that every group home I know of administers the medication I would think this requirement would be met.